IMPORTANT POINTS
Scope of section 11 of Arbitration and Conciliation Act, 1996 is limited and confined to examining existence of arbitration agreement and whether dispute require reference to arbitration.
Judge of High Court while exercising power u/s 11 should not discuss issues touching the merits of the controversy relating to the agreement.

JUDGMENT :

Abhay Manohar Sapre, J.

1. Delay in filing special leave petition is condoned. Leave granted.

2. This appeal is filed against the final judgment and order of the High Court of Delhi at New Delhi dated 03.12.2015 and 19.02.2016 in Arbitration Petition No. 434 of 2015 and I.A. No. 754 of 2016 in Arbitration Petition No. 434 of 2015 respectively whereby the learned Single Judge of the High Court allowed Arbitration Petition No. 434 of 2015 and dismissed I.A. No. 754 of 2016 in Arbitration Petition No. 434 of 2015 seeking change of the named arbitrator.

3. In order to appreciate the short issue involved in the appeal, it is necessary to state few relevant facts.

4. The appellant is an owner/landlord of the shop measuring 153.58 sq. feet situated at 1729, Gali No. 5, Govind Puri Extension, Kalkaji, New Delhi-110019 whereas the respondent was the appellant's tenant of the shop in question at a monthly rent of Rs.175/- since July 1977.

5. On 31.10.2014, the appellant and the respondent claimed to have entered into an agreement whereby it was inter alia agreed that the appellant on respondent's vacating the shop would demolish the shop and construct the new one in its place on or before 31.03.2015 and then sell the new shop to the respondent for a total consideration of Rs.42,00,000/-. The agreement further stipulated that the respondent has paid a sum of Rs.32,00,000/- by way of advance to the appellant in cash towards the sale consideration and balance amount of Rs.10,00,000/- was to be paid by the respondent to the appellant at the time of execution of the sale deed. Clause 14 of the agreement contained arbitration clause for making reference to the sole arbitrator in the event of any dispute arising between the parties in relation to the agreement in question.

6. The disputes arose between the parties in relation to implementation of the terms of the agreement, which led to exchange of notices between them by making allegations and counter allegations by both against each other regarding committing of breaches of the agreement. Eventually, the respondent (tenant) filed an arbitration petition being Arbitration Petition No. 434 of 2015 under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) before the Delhi High Court (Single Judge) out of which this appeal arises praying therein for appointment of sole arbitrator for resolving the disputes which had arisen between them. It was inter alia alleged that since Clause 14 of the agreement provided for appointment of sole arbitrator for deciding the disputes arising out of the agreement between the parties and when disputes have arisen between them, the matter should be referred to the sole arbitrator for his decision as provided in the agreement. The arbitration petition was contested by the appellant (owner/landlord) as non-applicant by denying the allegations made in the petition. However, the learned Single Judge by order dated 03.12.2015 allowed the petition and appointed one Shri Ashok Chhabra, Advocate as sole arbitrator to decide the disputes. It is against this order of the learned Single Judge, the owner/landlord has filed this special leave to appeal.

7. Heard Mr. Praveen Chaturvedi, learned counsel for the appellant and Mr. Vivek Sharma, learned counsel for the respondent.

8. Mr. Praveen Chaturvedi, learned counsel for the appellant, urged two points in support of his submission. In the first place, he urged that the learned Single Judge while allowing the petition exceeded his jurisdiction under Section 11 of the Act because he virtually proceeded to decide the main disputes itself by recording findings on such issues in Paras 9 and 10 of the impugned order. It was his submission that the findings recorded in Paras 9 and 10 and all such observations made in the impugned order, which touched the merits of the controversy, should, therefore, be set aside leaving the arbitrator to decide all such disputes in accordance with law in